The Finance Ministry has notified the recapitalisation bonds that will allocate ₹80,000 crore to 20 public sector lenders.

The bonds, which are split into six instalments, will bear interest rates between 7.35 per cent and 7.68 per cent and will mature between 2028 and 2033.

“The special securities will be issued in the form of “stock” to be held at credit of the investing bank’s Subsidiary General Ledger Account maintained with the Public Debt Office, Reserve Bank of India, Mumbai,” said the notification.

State Bank of India will receive the largest chunk of capital from the bonds, estimated at ₹8,800 crore, followed by IDBI Bank at ₹7,881 crore and Bank of Baroda, ₹6,975 crore.

Last year, the Finance Ministry had unveiled plans to infuse ₹2.11 lakh crore capital in public sector banks that have been staring at mounting bad loans pegged at ₹6.9 lakh crore at the end of September 2017.

Following this, it had, on January 24, announced a more detailed plan for recapitalisation of public sector lenders for the fiscal that includes over ₹1 lakh crore in capital through recapitalisation bonds, Budgetary support and fund raising from the market.

According to the notification, only the notified 20 lenders will be eligible to subscribe to the special securities and their subscription to the securities will be limited to the extent of the amount notified.

“The investment in the special security by the investing banks would not be considered as an eligible investment which they are required to make in government securities in pursuance of any statutory provisions or directions applicable to the investing banks,” it further said.

The bonds are unlikely to impact the Centre’s fiscal deficit as they will be a cash neutral arrangement, but will add to its liabilities.

All the bonds are non-transferable and cannot be converted into any other form of security.